SBJ/March 18 - 24, 2002/This Weeks Issue

Host moves into big numbers

The biggest question for those following the business side of March Madness isn't whether Duke will repeat as champion, but whether longtime NCAA sponsorship agency Host can play the transition game.

Host and CBS are on the run for NCAA sponsors.
Host, in partnership with tournament rights holder CBS, must switch from selling corporate sponsorship packages that cost in the low- to mid-seven figures each year to deals bundled with CBS that will cost exponentially more. According to a Host/CBS sales sheet obtained by SportsBusiness Journal, entry-level pricing for a three-year top-tier "Corporate Champion" package is $34 million for the first year, $36.4 million for the second and $39.7 million for the third. The asking price for a top-tier NCAA package next year is $110,034,200.

Even with a price tag like that, Jim Host, who has been selling NCAA marketing rights for 27 years, remains sanguine.

HOST
"Selling with our TV partner makes eminent sense and it's already gotten us in the front door of [clients] we've never been able to get in before," he said, while shying away from directly discussing pricing. "We're also selling a lot fewer sponsorships, and there's greater value on exclusivity in sports today than there ever had been."

Currently, there are 16 NCAA corporate sponsors, and their deals are up this year. Host and CBS hope to sell six top-tier "Champions" packages and four or five "Corporate Partners" (priced at $7 million to $10 million annually) this year, but that could change, as the longtime NCAA sponsorship agency seeks to profit off the $575 million deal it signed last year to sell sponsorships during CBS' 11-year, $6 billion rights deal, which begins with next year's tournament. Sources said cars and sodas were the first categories expected to be sold. Incumbent NCAA sponsors in those categories are GM and Pepsi.

"We know this is a whole different sell to a whole different marketplace, so we are going to be flexible," said Host President Marc Kidd.

The biggest question is how much value the NCAA and CBS will add to Host's basic NCAA rights deal. Pre-eminent among the new offerings is branding for top-tier sponsors within the tournament bracket graphics that are a fixture in CBS' tournament coverage. Kidd cited one study estimating the value of that on-air exposure at $13 million.

Corporate champions also get 158 commercial units: 22 in ancillary programming, 80 in regular-season CBS NCAA hoops telecasts, 18 in first-round playoff telecasts, 16 in the second round, eight each in the round of 16 and eight, and six in the Final Four and championship games. Additional TV includes presence in NCAA fall and winter championship TV shows, Final Four updates and NCAA gymnastics and track and field shows.

A public service announcement program will attempt to link sponsors' brand attributes with a cause-related campaign spread across such TV networks as CBS, MTV, VH1, Comedy Central, Nickelodeon, TV Land, BET, TNN, CMT and the ESPN networks. Continuing the synergy fest, the top sponsor packages include out-of-home advertising via Viacom Outdoor, anchored by a full NCAA men's tournament bracket display in Times Square to be mounted next March and annually thereafter.

Even with that much media, the largest sponsors may still find incremental increases of several million dollars. Consequently, there's already been some resistance.

"I see some increase in value, but I'm not convinced yet there's enough to justify an investment that much bigger and one with so many elements not necessarily controlled by my marketing department," said a top sports marketer at one of the NCAA's biggest sponsors.

Grassroots extensions of the package include an on-campus sports tour. Expanded intellectual property rights give sponsors access to the names and logos of NCAA schools in the tournament and collective college marks prior to the tournament. While the NCAA probably will never permit branding in and around the court (short of Aquafina's presence behind the benches), there's some talk of allowing branded sponsor kiosks in the hallways at tournament venues.

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